Raise the Hammer

Comment 29752

By A Smith (anonymous) | Posted March 26, 2009 at 10:46:40

Seancb, I don't want to smash anybody in the face, I just want people to stop looking to government to fix Hamilton's economic malaise. Government is not good at producing wealth, since it has no way of knowing the true value of the goods and services it provides. Without this knowledge, it can't know whether or not an investment has increased wealth, or destroyed wealth. There is simply no accurate feedback.

By lowering tax rates, you limit the amount of these economic black holes, thus increasing the proportion of investments that actually do produce value for society. Therefore, unless you first understand the necessity of having accurate feedback with regards to the allocation of capital, the city's local economy will continue to be filled with high hopes and nothing more.

Information is power, so by failing to use the feedback given to us by the role of prices, we are actually gambling more than we are planning.

Developing lots of ideas on how government should help the economy misses this point entirely. Therefore, instead of looking at how many ideas we can produce, we should focus on the right ideas, namely increasing the number of informed investment decisions. The only way to do that is to let the free market allocate capital.